Protecting yourself and your assets

Valuable assets require protection. What would you do if a freak storm or five-alarm fire destroyed your home? Most Americans have a majority of their wealth invested in their principal residence, and an uninsured loss would be devastating. Thus, insurance companies provide protection against this risk by charging clients an annual premium. Insurers come up with this number based on actuarial tables that determine the likelihood of an event actually occurring. They refer to this branch of math as risk management.

Insurance of any kind is a product sold, not bought. Unfortunately, it's a necessity in an expensive and sometimes dangerous world. No one wakes up and decides they want to buy insurance - most times, a friend convinces them that they need a particular type of protection and the process unwinds from there. When shopping, be sure to keep your eyes wide open.

Insurance contracts exist for many different types of losses. Common forms include:

When you are securing coverage, it's important to follow some basic guidelines to ensure you obtain the product that best meets your needs. They are as follows:

Always do your research before contacting specific companies . The Internet makes the search far easier today than a decade ago. In fact, many websites allow you to compare premiums between companies, saving you time and money.

Think about why you are buying the insurance in the first place. If you are single, have no dependants and want to save your family the expense of a funeral, life insurance to cover the cost of your burial is all you really need.

On the other hand, if you are the sole breadwinner in a household with multiple young children, you'll want to buy enough coverage to provide a reasonable future for your spouse and kids.

Make sure that any insurance contract you undertake is with a financially stable company. The last thing you want upon your death is your grieving family to be fighting with a financially insolvent business.

Do not buy more than one policy for any particular type of insurance. If you require life insurance, one policy for the full amount rather than several smaller ones will suffice. In the end, multiple policies will cost you more to achieve the same outcome.

Lastly, take your time making a choice. Don't be coerced into a snap decision - you'll most likely regret it.

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